tv [untitled] December 30, 2011 12:01pm-12:31pm PST
that is what you put into the budget last year. energy efficiency had been 5-8 in different years dropping to 1.5 million. >> and in city renewables was at $1.7 million to about 1.5 million by year 10. all three were going from about $5 million per year to $1-2 million per year. that is the cut we made last year. >> so that will ton decline is my question with this current scenario. >> that would continue to decline unless there is good news and choices made. but we are not planning restore those with the money available to us. >> and especially the energy efficiency programming piece, was there any data presented in
these conversations around the savings generated through the resale of energy or through savings that might be collected from those we sell or don't sell. >> we talked about it in long-term savings for departments and that it was a good thing that everybody agreed to. it took money up front to get the savings. people like all of those programs. it is reality the priority of the programs but don't like rate increases. it is looking at the school district and saying how much can they absorb and how fast. >> the rate ordinance that we would be proposing, i am sorry. we would be taking a rate action subject to action by the
board of supervisors. >> the board has the authority to veto. >> right. >> the board could take no action. >> that would apply for four years, which would be the years ending 13, 14, 15, 16. >> correct. >> ok. at the end of 16, as i recall, we are due to have another rate -- >> the five-year rate study, yes. >> cost of service study. my expectation would be that consistent with a policy to recover costs of service, that we would want to have or expect that after this four years there would be another four years. now, this chart, does it or does it not show rate increases. >> the conversations we have had for people. with the mayor he was comfortable with the two-year
budget having a two-year rate increase. when they were not comfortable with two cents we were able to say we need the two cents to go after the bond market. if no comfort was showing a rate increase past that. if not you would not have the rate shock every 10 years when you freeze it. but we have not proposed any rates past then. >> ok. keeping the fund balance above zero takes some gymnastics, i take it. >> yes. and what i am thinking is that a rate schedule that covers four years is one thing. what we put in the 10-year financial plan is something different. lots of stuff out there is not
preapproved by anybody. it would make sense, to me, to project that we believe that we do need to get up to cost of service one of these days. that we may want to do it in a gentle way. but at least show that continuing -- >> we can do that. this assumes nothing else changes in the organization. that is not a realistic assumption. >> i'm sorry. >> a lot of folks we work with will impose regulations that will cost money to comply with. there is not much for any of that here. we have to talk about how this continues to go. >> and if in 2019 you have had a failure of one of our generating units this would show no financial cushion to dole with that. >> yes. >> yeah.
>> i don't like it very much. i want to go on record saying that. you know it just does not sit well that we have not invested in the public goods part of our programming in a way they feel that we really should be. can i ask a little bit about, the two cents, the reason for the two cents even if it is over four years we would be eligible for bond financing. >> one of our credit strengths has been that you have had the political will and the policy making authority with the board also not rejecting them to do these four-year rates sending a very strong signal. >> it worked on water and waste water. so that would be good. two cents does right the fiscal
ship but it does not allow you to do extra or additional things that are very beneficial potentially. >> i might be speaking out of school here a bit, but there would be the potential? it is cheap to borrow money now, right? relatively. is there a way run the money -- >> only cheap if you have the credit. >> which we do. >> we wanted to tee up all of the rate agencies checklists that guto. do you have in place a multiyear rate plan already. if it is passed that is a credit strength.
>> if we got a positive rating, is there a way to run the numbers based on energy efficiency savings? i don't know if the market is there or energy sales in this market and with the renewables or what have you. >> we will definitely look at that when we do the funding. you funded the conversion of the cobra head street lights that. produced additional revenue. each time we can include what that savings will be.
to put those programs back would cost us $90 million. the total amount we got out of the rate increase. we won't be able to restore all of them, but i think we share your concern that those are important programs. what can we do. we will always be on our minds. the projection is the $19.5 million for cca? >> yes. >> that is in there. the restoration of the fund balance is in there. the four cent version is what allowed you to do the add
backs. within the four years of rates we are talking about, which does not get us into that dip area, if you take three proposals, the half cent for four years, the one cent for two years and the one cent for four years, that's it. afford ability, clearly half cent is more affordable. that is a good deal what is driving this. all of them are compliant during that four-year period. when you look out beyond that it is questionable if you do not do additional rate increases. within the four years it is compliant. sufficient. that is where you have questions. it is sufficient for some purposes but not others. to the extent the add-backs are important policy things that we want to do, this is not sufficient to that.
and i don't know what you have to do to get sufficient for that. the four cent version or half cent, half cent, one cent, one cent, there are other versions of that. that shows up in the sufficiency cri tear yeah. all of them are transparent because of the discussion we are having right now and the review that the rate fairness board and others are putting on. so, that was my own test of how these things stack up against a rate policy that we talked about in the last item. >> so, the compliant one just to unpack, what about our greenhouse gas emission compliance question around local and state. we have a local climate action plan and the big piece around that we are trying to do as a city. buildings are a huge contributor as such. maybe 32. the governor's renewable mandate for the state.
the compliant piece we might have questions about that as well if we are go to use the fit cher i feel is effective. >> that would be a question. let me ask it. with the half cent for four years, is there any element of law like that we would be out of compliance with? >> we do not believe so. i think the single biggest thing coming up is the renewable portfolio standard requirement. when we have down times it will cost us more probably to buy green power to meet those standards, and that is in the budget at about $11 million per year, assuming that is sufficient to be able to buy that greener mix of power. so we tried to anticipate and over 10 year its is hard. we tried to anticipate and put the money in that would allow
us to be compliant with those. >> those were our tradeoffs. the last slide is how the affordibility looks for our customers. on slide 14. it is a little more affordable for customers. >> i don't understand how you received those opinions. did you guys do focus groups? when you say you talked to customers what did that mean? >> we met with the deputy superintendent at the school
buildings, walked through what it would mean for their operating budget. talked to the municipal railway, reviewed all of the numbers with the mayor's office. the budget instructions as well as their short fall projections assumed and included this. >> ok. then it is with us, and i think the question we have been focusing on, commissioner, are at the heart of the matter. and we have talked a lot about the need to get up to cost of service as quickly as we can. i am frankly heartened by the fact that there seems to be acceptance of the notion that we would commit to a four-year
program of rate increases. that has not happened, ever. and we have been fighting this battle for a long time. so i view that, whether it is sufficient or not, it is a huge step in the right direction. it would be a logical basis for our own financial planning and continuing it. >> i can ask a question. is there anything embedded under public service, public goods? when we are setting our rate policy and we are looking at the compliance and component something that takes into
account -- >> the way that it is currently structured is that it would come under sufficiency. if we had a policy public goods that would be a part of the discussion. >> i think sufficiency would be our obligations on more of a bricks and mortar. >> frankly as we were talking about it, i was trying to figure out where things like that would belong. they stands at odds with affordibility or there is a potential there. this puts the nonfutility functions on a very similar level of functions as the utility functions, which say fist we adopt a policy we ought to be serious about it and how
we are go to fund it. and that is the assumption. if we wanted the policy to be reflective in rates, than adopting one would get it into the significance part. >> when we are looking at a question like this through that lens we can't say it is insufficient. >> right. >> right. >> yeah. and frankly that is why i was focusing on what happens after this four years. if all we thought we would do is get four years of half cent increases i would have a problem with this program as well. it does not get us far enough. but i don't know how many years that i messed with budget stuff and we never had the city sign off on doing more than a single increase and then usually far
below what we ask for. getting a four-year commitment to what can become an ongoing program is a huge, huge step. now the other thing is that we can say that half cent is not enough. you can have is escalating. we can shove tel any way we want to. the sfingts things is that we have a understanding and acceptance if not support for the half cent. what would be the pleasure of the commission? this is an action item. we can take public comment first. if you would like. does that sound good to people? ok. ask for public comment.
>> the public hearing, so, you know. so this really is very serious stuff, and i appreciate that you are taking the time to work through it. it is not supplierly easy. there are simple concepts and more complicated stuff. i appreciate you walking through this. if we get somewhere with this it will be a major accomplishment for all of us who includes the president and general manager and todd, with all of their great wisdom, not yet to get to the promised land on this issue. fiam understanding it correctly, and i also want to see if i am getting this, those customers who are not paying at all now, city hall and hall of justice in particular, over four years that only gets them to two cents. even if we went with the half cent per year it would take 17 years to get to the current cost of service meaning that they would not pay the full freight until like 2030 when
many of us will still be here. that is how long it takes to get those at the lowest rate up to where other people are or could be. is that correct? >> that is correct. >> taking people from where they are today and adding a half cent to it. >> it seems like at a minimum someone could pencil out at least the next six years of a half cent per year to see what 10 years of bringing them to, and because it does not -- it is not a straight line calculatio not all of those customers are at answer and they are not all buying the same amount of power. at least doing 10 years of a half cent per year is worth penciling out to see what that generates for the capital project for solar and energy efficiency and all of the other things that are not yet being
done. i certainly support at least doing this. i am hezztoont raise the question about prop 218, but perhaps i should. under prop 218 are we at all obligated to bring customers to cost of service at all or by a certain time or are we not really bound by that as related to electric and the way it is for water and sewer. >> prop 218 is related to property related taxes or fees and are included power rates are not. >> ok. but at least it is still a good idea and we are prying to get there. as i say i am supportive of what it does as much as it does, it does not do all of the things we need to do. if the commission would like to express an intent of at least
doing a half cent for the next 10 years, again, intent and not actual commitment. that would help. giving staff direction to pencil it out would be good. i want to again agree with the commissioner that in-city energy efficiency is not important, if we are charging departments more than they ever paid and we are not at all compensating by saying that we are going to fix your bulbs and motion detectors and all of the other things we should be doing, it seems that it is -- it seems more punitive than it needs to be. whether that is with p.u.c. staff or department of the environment folks who may be cheaper to do the energy efficiency programs, we should find ways to fund energy efficiency, even if it is
innocent this four-year period. i understand that. even if it is in years 5, 6 and after we should express that as in intent and not commitment. hope that is helpful. thank you. >> just to be clear on that orkts energy efficiency the money left in there will allow us to do audits but not most of the work. there would be enough to at least do the audits. >> but there would not be incentivized to the extent that if they were paying more than they were currently paying. >> if they took the time to change out their light bulbs, they would save money. >> save on the bottom line. >> it sen couraging that type of behavior. >> all right. >> good afternoon one last time. i was go to say this when item 11 was supposed to come up. so, i stayed with this. i am eric brooks speaking on
behalf of the san francisco green party and the local grass roots organization. first of all, it is very nice to come up to this podium and agree with staff completely. that is not often the case. i think the fact that this is the first time in who knows how long that the rest of the city family actually said, ok, we will do this. that is a big deal. even though it is not enough money, the fact that we have gotten that far is a big deal and we need to go with that. with that said, however, i think that it is really key to focus on especially energy efficiency and municipal rooftops for solar and small wind, demand response and et cetera. you know, right now basically we have a boat that is filling up with water very quickly.
we have been bailing with a ladle. what staff negotiated is giving us a bucket instead of a ladle. but we are still not plugging the hole that. is what things like energy efficiency do. if we are letting the hole sit there by cutting the energy efficiency budget we are shooting off our nose to spite our face. i think what the commissioner said about bonds is absolutely crucial. when a few days ago the cca were talking with g.m. harrington about this and we knew that there was a half cent for four years proposal, the main question that we asked is will that give us the bond rating that the sfpc needs to do these projects and like installations on school buildings, city buildings, things like that so that we can actually create a program to go
to all of these entities we are raising rates on that is a planned program. just like with item 12 where we say you need to have a plan. this is the same situation. perhaps in this resolution or a follow-up, the commission can say to staff, all right. let's do an energy efficiency plan. one that draws on information that will come from the build-out work, but not just that work but let's look at all of these city buildings and state buildings and schools we are raising rates on. muni. find out where the opportunities are to get efficiency and renewables on there so that we can reduce the pain or do a higher increase. i would second in a different way why not charge city hall
more than a half cent per year. the key message is let's use the bonding authority as fast as we can to build a plan around it instead of just doing the increase and coming up with a plan later once we decide we can bond. direct staff to go for it and create a plan. >> i chair the c.a.c. power subcommittee. we voted on a resolution couple weeks ago to support this rate increase. to create a rate increase that met the cost of service. i know you have gone to various stakeholders in the city and there seems to be some agreement from various
stakeholders. what i am concerned about now is that you need the political will. there is really not a political part to back this. and what we are go to talk about tonight at the c.a.c. is that you need to go to the neighborhood groups. those that represent districts to their district supervisors and tell them it is an important feature. that it is supporting policies that the community generally supports. otherwise i see that it is a done deal. there is a lot of opportunity to cut it further down. please reach out and get this through. it is really paltry level.
it sent sufficient. and there is community backing for this. thanks. any additional public comment. >> is there a reason that we have to vote on this now? >> i think the rules do not allow you to abstain. >> i don't mean that. can we continue it in any way to get more information on doing some outreach in neighborhood groups or i don't know about city halls in the mix. ideas that came up. >> that was also requested by one of the supervisors we spoke to saying why now. we were hoping it to be adopted in january. if you don't have it will be different.
so not knowing what it is until later in the year really changes the entire budget. all the other departments and agencies we affect are doing their budgets in february and march. if we don't come to them until march, their response will be, great, but we can't do it this year. so if we don't do it early enough for their budget deliberations, the push-back will be "harper's harsher. those are the reasons for doing it now and not later. >> if i may. and i'm glad that we're talking about this now because i'm actually -- have some familiarity with negotiations with the city and the budgeting and i bve